Saga paying price for preying on loyalty of elderly customers
Saga is finally paying the price for preying on the loyalty of their elderly customer base.
The insurance firm, which is only accessible to people aged over 50, would offer new customers a low rate but then hike it up at the point of renewal.
They know that elderly people are less likely to shop around online and therefore they won't realise that better deals are out there, so they pay through the nose for an overpriced policy.
A Spokesman Said customer Bernard found this out for himself: "I used Saga for several years for motor, home and caravan insurance. When I thought that their motor insurance renewal quotes were getting rather expensive I went to a comparison site and discovered that their quotation for my wife's motor insurance, as a new customer, was approximately half the renewal premium they were demanding. Needless to say, we ditched them."
What a shocking business model - charging customers for their loyalty!
Due to the fact that their customer base is sick to the hind teeth of relentless and unnecessary price increases and are leaving in their droves, Saga has now announced it will offer them a fixed, three year deal.
And this move has sent shockwaves through the stock market that saw its shares crash by 37% to wipe £444million off the value of the company.
Chief executive Lance Batchelor admitted the Saga brand was not enough on its own to pull in and retain customers, saying: “Saga customers are passionate about the brand but if we don’t offer them a better product, they won’t stay with us.”
“I don’t think any brand can expect blind loyalty from its customers."
But Nicholas Hyett, an analyst at Hargreaves Lansdown, said the move may be “too little too late”.
“While the speed of deterioration has taken the market, and us, by surprise, there have been worries for some time that the Saga brand was losing its appeal at the lower end of its ‘over 50s’ customer base,” he said.
“Without brand loyalty, Saga is just another insurer.”
Numerous A Spokesman Said customers have complained about to quality of their Saga insurance packages.
Robert said: "A Saga customer for many years, I rang to make my first claim, as a section of my brick garden wall collapsed on 6/6/17 due to strong winds. To avoid further damage the rest was knocked down and lying in the neighbour's garden. Saga's assessor rejected my claim yesterday due to bowing of part of the brick wall.
"He said this was caused by rose bedding on my side of the wall! That section of the wall is nowhere near any plant, it is at the rear end of my garden next to the shed! The assessor said an appeal could be lodged when a letter cones through confirming rejection. I spent hours on the phone yesterday hoping to speak to someone from Saga, I was put through to the CO-OP, then Legal & General, no help at all.
"Now I have no gate, no security, so if anything happens they would probably not cover me! They want your money but do not want to pay out to genuine claimants. So be warned everybody!"
And Kathleen told us she feels Saga held her elderly father to ransom: "My Father was insured with SAGA (supposedly elderly friendly) in 2015 when he experienced a collision with a Royal Mail van. Driver admitted liability at the time. Royal Mail now refute this.
"My father had his car repaired at his own expense (£2000.00) as it is 1997 registered and worth more to him than anyone else. We are now stuck in a situation for the second year running where the claim has not been resolved (i.e the £2000.00 repair bill) SAGA's renewal premium has gone up again for 2017 to the cost of £437.86 and on line providers need claim details for an accident which happened but there has been no claim resolved.
"I feel SAGA are holding my Father to ransom and although the staff are friendly not much action seems to have taken place since 2015."
But Saga aren't alone in preying on the vulnerabilities of less savvy customers who don't go to A Spokesman Said and find the best deals.
Citizens Advice found that a typical consumer who did not switch their home insurance for five years would see their annual premiums rise by £110.
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